Dissolution - Law on Partnership

Question 1

This refers to the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on of the business.

Answer 1

Dissolution

Question 2

This is the process of settling the business or affairs of the partnership after dissolution.

Answer 2

Winding up

Question 3

This refers to the point when all the business or affairs of the partnership are completely wound up.

Answer 3

Termination

Question 4

PARTNERSHIP NOT TERMINATED BY DISSOLUTION

True or False?

Answer 4

True

Question 5

The principal significance of dissolution is that, thereafter, no new partnership business should be undertaken, but affairs should be liquidated and distribution made to those entitled to the partners interest.

True or False?

Answer 5

True

Question 6

The partnership continues until winding up is completed.

True or False?

Answer 6

True

Question 7

What are the causes of dissolution that are extrajudicial?

Answer 7

LIVIDU

L - Loss
I - Insolvency of partners
V - Violation of partnership contract
I - Interdiction (Civil)
D - Death
U - Unlawfulness
W - Without violating partnership contract

Question 8

Causes of dissolution (ExtraJudicial)

1.Without violation of the agreement of the partners.

Through?

Answer 8

a. By the termination of the definite term or particular undertaking specified in the agreement.

b. By the express will:

c. By the expulsion of any partner from the business bona fide in accordance with such a power conferred by the agreement between the partners.

Question 9

Causes of dissolution (ExtraJudicial)

1.Without violation of the agreement of the partners.

b. By the express will:

Answer 9

1. Of any partner who must act in good faith, when no definite term or particular undertaking is specified.
2. Of all the partners who have not assigned their interests or suffered them to be charged for their separate debts, either before or after the termination of any specified term or undertaking.

Question 10

Causes of dissolution (ExtraJudicial)

In contravention of the agreement between the partners, by the express will of any partner at anytime./ *In violation of agreement

What is the remedy?

Answer 10

The withdrawing partner can be held liable for damages.

Question 11

The business was lawful from the start but it became unlawful due to supervening event and this is a ground for dissolution of the partnership.

True or False?

Answer 11

True

3. When any event makes it unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership.

*Unlawfulness of the business
business can no longer continue because of illegality

Question 12

If it is lawful from the start, the business has no juridical personality (no partnership)

True or False?

Answer 12

True

Question 13

Causes of dissolution (ExtraJudicial)

4. In the following cases of loss:

a. Loss before or after delivery of property where the partner contributed only its use or enjoyment, he having reserved the ownership thereof.

Who bears the loss?

Answer 13

The partner who owns the property bears the loss.

Question 14

Causes of dissolution (ExtraJudicial)

4. In the following cases of loss:

b. Loss before delivery of specific thing, which a partner had promised to contribute to the partnership.

If the loss occurs after delivery, is the partnership dissolved?

Answer 14

No, the partnership is not dissolved. The partnership, being already the owner, bears the loss.

Question 15

To summarize, what are the Causes of dissolution (ExtraJudicial)?

Answer 15

1.Without violation of the agreement of the partners.

2. In contravention of the agreement between the partners, by the express will of any partner at anytime.
3. When any event makes it unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership.
4. In the following cases of loss:
5. By the death of any partner.
6. By the insolvency of any partner or of the partnership.
7. By the civil interdiction of any partner.
8. By decree of court

Question 16

What are the causes of dissolution (judicially)?

Answer 16

ILIBOG

I - Insanity
L - Loss
I - Incapacity
B - Breach of Agreement
O - Other Circumstances
G - Guilty

Question 17

Causes of dissolution (Judicial)

8. By decree of court in the following cases:
   a. On the application by or for a partner
   (i.e., a partner or his legal representative files the application) to dissolve the partnership whenever:

Answer 17

1) A partner has been declared insane in any judicial proceeding or is shown to be of unsound mind.
incapacitated

2) A partner becomes in any way incapable of performing his part of the partnership contract.

3) A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business.

4) A partner willfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him.

5) The business of the partnership can only be carried on at a loss.
palugi na ang business (but partnership purpose is to obtain loss)

6) Other circumstances render a dissolution equitable. (Art. 1831)

Question 18

Causes of dissolution (Judicial)

8. By decree of court in the following cases:

b. On the application of the purchaser of a partner’s interest

Answer 18

1) After the termination of the specific term or particular undertaking.

2) At any time when the partnership was a partnership at will when the interest was assigned or the charging order was issued. (Art. 1831)